Correlation Between Pimco Global and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Pimco Global and Dow Jones at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Pimco Global and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Global Multi Asset and Dow Jones Hong, you can compare the effects of market volatilities on Pimco Global and Dow Jones and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Pimco Global with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Global and Dow Jones.
Diversification Opportunities for Pimco Global and Dow Jones
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Dow is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Global Multi Asset and Dow Jones Hong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Hong and Pimco Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Pimco Global Multi Asset are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Hong has no effect on the direction of Pimco Global i.e., Pimco Global and Dow Jones go up and down completely randomly.
Pair Corralation between Pimco Global and Dow Jones
Assuming the 90 days horizon Pimco Global Multi Asset is expected to generate 0.38 times more return on investment than Dow Jones. However, Pimco Global Multi Asset is 2.64 times less risky than Dow Jones. It trades about 0.15 of its potential returns per unit of risk. Dow Jones Hong is currently generating about 0.01 per unit of risk. If you would invest 1,241 in Pimco Global Multi Asset on September 2, 2024 and sell it today you would earn a total of 250.00 from holding Pimco Global Multi Asset or generate 20.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.25% |
| Values | Daily Returns |
Pimco Global Multi Asset vs. Dow Jones Hong
Performance |
| Timeline |
Pimco Global and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Pimco Global Multi Asset
Pair trading matchups for Pimco Global
Dow Jones Hong
Pair trading matchups for Dow Jones
Pair Trading with Pimco Global and Dow Jones
The main advantage of trading using opposite Pimco Global and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Global position performs unexpectedly, Dow Jones can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dow Jones will offset losses from the drop in Dow Jones' long position.| Pimco Global vs. Pimco Rae Worldwide | Pimco Global vs. Pimco Rae Worldwide | Pimco Global vs. Pimco Rae Worldwide | Pimco Global vs. Pimco Foreign Bond |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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